Quantitative Easing: CNBC Explains

CNBC Explains

Wednesday, 3 Oct 2012 | 12:09 PM ETCNBC.com

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Quantitative Easing: CNBC Explains

The U.S. central bank engages in quantitative easing to influence the economic activity and increase cash in order to stimulate the economy as a whole. But how does QE differ from normal federal reserve open market operations? Salman Khan of the Khan Academy explains.

If you’ve been reading about the markets recently, it’s likely you’ve heard about quantitative easing, also known as QE. The U.S. central bank engages in quantitative easing to influence the economy by increasing cash in order to stimulate economic activity. But how does QE differ from normal federal reserve open market operations? Also, how does U.S. quantitative easing differ from Japan’s quantitative easing program? Salman Khan of the Khan Academy explains the finer points of quantitative easing.

From the first video, you’ll understand:

How quantitative easing differs from normal Fed operations

The types of assets purchased by the Fed under QE

Quantitative Easing, U.S. vs. Japan: CNBC Explains

The U.S. central bank engages in quantitative easing to influence the economy by increasing cash to stimulate economic activity. Quantitative Easing has been done in other places, such as Japan. But how does U.S. quantitative easing differ from Japan's quantitative easing program? Salman Khan of the Khan Academy explains.